EANS-Adhoc

Telekom Austria Group Acquires Two Cable Operators in Bulgaria (Ad-hoc Release)

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Company Information

15.09.2010

Shareholder Information

Telekom Austria Group Acquires Two Cable Operators in Bulgaria
(Ad-hoc Release)

Vienna, 15 September 2010 - Today, the Telekom Austria Group (VSE:
TKA, OTC US: TKAGY) announced that it has agreed to acquire 100% of
Megalan Network AD and 100% of Spectrum Net AD, two cable operators
in Bulgaria. The combined debt free value of both entities will
amount to a total of EUR 83.0 mn. Telekom Austria Group will acquire
both companies through its Bulgarian subsidiary Mobiltel and will pay
an amount of EUR 72.0 mn out of existing cash flow, which includes a
performance oriented element of a total of EUR 14.5 mn. This portion
of the purchase price will be paid by end of 2011 and is subject to
the achievement of performance criteria.

The acquisitions are subject to the approval by the Bulgarian
competition authority. Local management of Megalan and Spectrum Net
will remain in place as both companies will operate as separate
entities for approximately 18 months. However, product bundles under
the M-Tel brand will already be launched in 2010.

"The convergence of fixed and mobile communication has become a key
feature of the telecommunication market. This trend is clearly
visible in Telekom Austria Group´s home market and now also
increasingly shapes the competitive environment in Bulgaria. As such,
the planned acquisition of two cable operators will be the natural
next step for Mobiltel. It will allow Mobiltel to become a fully
integrated operator and to participate in the strong anticipated
growth of fixed broadband, IPTV and convergent products. Moreover,
this step will further strengthen its leading position and will
ensure future growth in an existing market, a continuation of Telekom
Austria Group´s strategy", says Hannes Ametsreiter, CEO of Telekom
Austria Group.

The two companies complement each other through their product
offerings and will enable Mobiltel to address both business and
residential customers. Megalan is the leading provider of residential
broadband in Sofia and offers broadband as well as IPTV services.
Spectrum Net focuses with broadband and voice services on business
customers in Bulgaria´s major cities. Combined the two companies had
85,400 access lines by year end 2009. In 2009, the two companies
generated a total of EUR 25.3 mn of revenues and EUR 7.0 mn of